SAO PAULO/MEXICO CITY, April 5 (Reuters) – Latin American stocks rose to their highest since June 2008 on Tuesday, but profit-taking in Mexico and signs Chile’s rally may be running out of steam could limit gains in the coming sessions.

The MSCI Latin American stocks index .MILA00000PUS rose 0.42 percent, extending a rally seen since mid-March.

Investors bet a move on Tuesday by China to tighten borrowing costs would help manage to tame strong growth without undermining high prices for Latin America’s key commodities.

“China will keep growing, just at a slower pace,” said Gerardo Copca, a strategist at consultancy Metanalisis.

China is Brazil’s top trading partner and also one of Chile’s top customers for its copper.

Chilean stocks led gains in major regional markets, with the IPSA index .IPSA rising 0.56 percent to close at its highest since late January as industrial conglomerate Copec CPO.SN rose 1.99 percent.

Surprisingly strong growth data in Chile backed bets that the country’s stocks could see solid profit growth during the first quarter. [ID:nN05100042]

However, the IPSA’s relative strength index hit a level that suggested it was overbought, which could push some investors to take profits in the coming sessions. The RSI is used in technical analysis to gauge an asset’s momentum.

In Brazil, Adriano Moreno, a strategist with Futura Investimentos, said flows into Latin America had stabilized after foreign investors pulled out of emerging markets during the first quarter of the year to return to developed markets.

Brazilian stocks lagged other major markets in Latin America last year, but high hopes for corporate profits this year were now buoying stocks, he said.